Depending on when you filed your tax return, more money may be on the way.
Angela Lang / CNET
Tax Day fell on July 15 of this year after the IRS postponed the traditional April 15 deadline due to the Covid-19 outbreak. And that was just one of several unconventional policy maneuvers the federal government has undertaken to help struggling Americans during the coronavirus pandemic. Also issued stimulus controls, who were sent to qualified taxpayers in April (If you haven’t received one yet, check out our guide at How to Track Your Stimulus Checkup.)
A second round of stimulus checks was a key component of republicans CURES Law, announced Monday. It could help offset the loss of the additional $ 600 in unemployment benefits that were part of the CARES Act, and which will expire on July 31. (Note that Republicans have proposed a new unemployment benefit for $ 200 per week as part of the HEALS Act.)
But the stimulus payments are completely separate from the tax refunds, millions of which are still being processed by the IRS. The 2020 tax deadline extension, which gave all taxpayers more time to complete the paperwork, calculate refunds and pooling the payments will also result in some taxpayers getting a few more dollars from the government. Read on to find out if you can expect to receive a second IRS tax refund payment, and when it might appear in your bank account or mailbox.
Why does the IRS send a second check to some households?
Every year, the IRS pays interest on refunds that require additional time to process, and interest accrues from April 15 until the agency cuts your check (or withdraws your direct deposit). If you haven’t received your refund check yet, you’re not alone: The IRS said in June that it had a delay of 4.7 million returns.
This year, the interest accrual period started on April 15, as usual, even if you didn’t apply until July 15. So in reality, there was a modest but real advantage to the presentation later this year. Combine that with the IRS order book, and it means that more people than usual will receive an IRS tax interest payment this year.
Are these IRS payments different from stimulus payments?
Yes. The CARES Act provided only once stimulus payment to eligible US residents, designed to provide financial assistance to the millions of people financially affected by the pandemic. It’s a bit confusing, because the stimulus checks were issued by the IRS and are based on the 2019 individual adjusted gross income. But they are totally independent and different from this year’s tax refunds and tax interest payments.
Who will receive a tax interest payment?
Taxpayers eligible for a refund, who did not receive it before April 15, will accrue a certain amount of interest. The amount of that interest can be sent as a second check or direct deposit.
How much will i get
As usual, the IRS will pay 5% annual interest, compounded daily through June 30. On July 1, the interest rate drops to 3%. For every $ 1,000 returned to you, you can expect to charge around 14 cents of interest per day between April 15 and June 30 and 8 cents per day thereafter.
Is there a trap?
There is always a catch.
“Interest is taxable,” said Pamela Lucina, chief trustee and head of the advisory and trust practice at Northern Trust Wealth Management. “This means that you will receive a 1099-INT for 2019 and pay taxes when you file your 2020 return.”
When will I receive the payment of my tax interests?
The IRS says that the tax interest payments could come in a second check or direct deposit, although they could also be added to an upcoming refund. In an email to CNET, the IRS said: “The exact time has not yet been determined, but it will be later this summer.”
See this:
Still haven’t received your stimulus check? Let’s trace …
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